Image Source: Baidu

In the PC era, Ali, Tencent, and Baidu were the leading companies in e-commerce, social networking, and search respectively, and the three companies had the title of "BAT" giants.

However, with the rise of mobile Internet, Baidu's market value gradually lagged behind other companies. Between Baidu and Ali or Tencent, there are Internet companies such as Pingduoduo, Jingdong and Meituan.

The wrong decision in the field of mobile Internet, Baidu lost a lot of market share. And it also forced Baidu to target the next trend in the industry, firm determination to do AI. But most of Baidu's revenue now comes from advertising. The reliance on advertising revenue has also led Baidu to be branded as an advertising company rather than a technology company.

Baidu's investment in AI is huge. Robin Li, the co-founder, chairman, and CEO of Baidu, has mentioned in public speeches that Baidu has cumulatively invested more than 100 billion yuan in artificial intelligence in 10 years, with core R&D investment accounting for more than 20% of core revenue for several quarters in a row. The financial report shows that Baidu's R&D expenditure in 2022 will be 23.3 billion yuan, accounting for 24.42% of core revenue.

However, Baidu's multi-year investment in AI has not yet waited for the harvest period. In 2022, Baidu's non-online advertising and marketing revenue, which includes cloud services and other AI-powered businesses, will be 25.9 billion yuan, up 22% year on year. Compared with the investment, it has not yet brought much profit.

At present, the direction of commercialization of Baidu's AI business is not clear. Search engine, cloud services, and smart cars are the three main areas where the market perceives Baidu's AI technology.

In terms of search engine, Baidu is equipped with voice, image, natural language processing and other AI technologies, which can perform voice search, photo search, real-time translation, plant recognition, video search and other operations. But Baidu's search engine market share is constantly being eroded by competitors. According to Statcounter agency data, in February this year, Baidu search engine market share of 55.8%. And the same period last year, Baidu's market share is 84.02%.

In the cloud services market, there are many niche technology areas, has not yet formed the head of the enterprise, so many cloud services companies are grabbing the market. Automotive, finance, video, government and enterprise areas have become the intelligent cloud empowerment object, Baidu intelligent cloud pressure is not small.

In terms of intelligent cars, it is still unknown when Baidu can get returns. Baidu around the self-driving investment for many years, but has not yet appeared to land the possibility of realization.

Therefore, Baidu urgently needs to find a suitable commercialization path for ERNIE Bot to achieve long-term investment and benefits.

Of course, there is still a long way to go from technology to product. Earlier this year, Robin Li talked about ChatGPT, saying that ChatGPT is a new opportunity arising from the development of AI technology to a certain point, but to turn it into a product that everyone needs, this step is actually the most difficult.

ERNIE Bot also needs to be tested by the market and accumulate more data for training large models. Baidu announced that more than 400 companies have announced access to the Baidu ERNIE Bot ecology, involving the Internet, media, finance, automotive, enterprise software and other industries.

For Baidu, the advantage is that it already has a content platform and can make better use of content generation capabilities. Compared with foreign AI language models, Baidu's ERNIE bot also has the advantage of Chinese language differentiation.

With AI as a long-term technology investment, it will take time to answer whether ERNIE Bot can bring new business imagination to Baidu.

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